Lamb Weston Holdings, Inc. recently agreed to acquire equity interests in its European joint venture with Meijer Frozen Foods B.V., valued at approximately $691 million in cash and common stock of Lamb Weston, according to a press release.
“Lamb-Weston/Meijer was built over the last 28 years, and we’re grateful to Meijer Frozen Foods for their long standing partnership,” Tom Werner, president and CEO of Lamb Weston, said. “The joint venture has served as a strong platform to drive growth in Europe and the Middle East, as well as to support our global customer base across our key international markets. This transaction firmly aligns with Lamb Weston’s long-term capital allocation and acquisition framework, and we believe it will strengthen our manufacturing footprint by leveraging a truly global supply chain to better serve our customers and position us to take advantage of growth opportunities in Europe, the Middle East and Africa.”
Upon completing the transaction, subject to regulatory approvals, Lamb Weston will have full ownership of the merger. Lamb Weston will make the payment in the form of new borrowings and cash on hand. Goldman Sachs contributed to the transaction as financial advisor to Lamb Weston.
With this new acquisition, the company can now include the merger, Lamb-Weston/Meijer, in the Equity Method Investment Earnings of its financial statements. The company hopes to finalize the transaction by the second half of fiscal 2023.
“We’re proud of the business we’ve built together to create a market leader in Europe,” Kees Meijer, CEO of Meijer Frozen Foods, said. “We remain confident in the long-term outlook for Lamb Weston and the global frozen potato category. By holding an investment in common stock of Lamb Weston after the transaction closes, we sustain our strong belief in a bright future for the business.”
Under the terms of the deal, the company will now own five additional manufacturing facilities across the globe, including the Netherlands and one in the United Kingdom, and a sixth facility, acquired through a 75% interest in a joint venture agreement in Austria, and 1,500 employees will now fall under the management of Lamb Weston.
The facilities are collectively credited with producing two billion pounds (910,000 MT) of finished frozen products per year. Lamb-Weston/Meijer’s total net sales in fiscal 2022 is estimated to be approximately $941 million.